8.23.2010

Gem of the day

The Wall Street Journal wow us--again, I should add--with a phenomenon of an article. I'll let the title speak for itself:

"The Case Against Social Corporate Responsibility"

So you can get an idea of the level of depth we're dealing with, here's the introductory sentence:

"Can companies do well by doing good? Yes—sometimes."

Sounds good! So what's the thesis of his 'case' against CSR?

"Very simply, in cases where private profits and public interests are aligned, the idea of corporate social responsibility is irrelevant: Companies that simply do everything they can to boost profits will end up increasing social welfare."

Nice and simple. I can see the linear correlation of the graph now: economic growth = increased human well-being. Sounds great. The author moves on to cite various harmonies of profit-seeking business and social welfare--the usual suspects of energy efficiency, fuel-efficient vehicles, healthy food--and delivers this whopper based on his narrow selection of evidence:

"It is the relentless maximization of profits, not a commitment to social responsibility, that has proved to be a boon to the public in these cases."

And therefore:

"Still, the fact is that while companies sometimes can do well by doing good, more often they can't. Because in most cases, doing what's best for society means sacrificing profits."

His solution? Government regulation, with 'self-regulation' as an alternative. It's been awhile since I've read something in a major news outlet that is not only this reprehensible, but also fundamentally illogical and ignorant. If we're going to reduce the idea of CSR to a simple business proposition, it's certainly not a 'financial calculation'--it's managing short and long-term risks.

These are risks that every shareholder faces because, at the end of the day, every shareholder is also a stakeholder. It's about the health risks of pollution and poorly manged corporate supply chains. It's about justice and equity in the developing world--and the developed world, for that matter, as anyone who's ever paid a wee visit to, say, Detroit, would know--it's about the risks to delivering core products posed by declining ecosystem services. Etc. And, of course, it's about climate change.

When you realize that all corporations depend on the planet, and the many, many natural services it provides for free, to go about the very business this author is claiming is jeopardised by CSR 'obligations', you just have to laugh. Or cry.

Dear Wall Street Journal, please stop publishing pure B.S. coursing out of business schools that still teach business methods from the 1950s. Thanks!

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